On a regular basis, economic data released by the various government agencies responsible for doing such things is depicted negatively by America’s mainstream media. From unemployment to inflation to housing prices, regardless of the facts, the press typically report nothing but gloom and doom.
Robert Samuelson in this week’s issue of Newsweek candidly informed readers why. After giving a synopsis of positive forecasts for 2006, Samuelson said, “All this good news is, of course, bad for the news business,” and asked, “Could anything darken the outlook and, coincidentally, feed journalism's appetite for misfortune?”
Samuelson then presented five economic cataclysms to cheer up the doomsayers:
- Housing. “A ‘bust’ would involve sinking prices after some big gains: about 25 percent over the past two years. That could depress consumer confidence and spending. If rates on adjustable-rate mortgages (more than half of new loans in 2004) rose sharply, more homeowners might miss monthly payments.”
- A dollar crash. “A dollar sell-off could do the opposite, hurting housing (above) and consumer spending.”
- GM going bankrupt. “If the UAW were to strike, GM might also shut down (no parts, no cars) and suffer massive losses.”
- $85 oil. “Energy economist Philip K. Verleger Jr. thinks prices could rise up to 25 percent from 2005's peaks, driven partly by a scramble for low-sulfur oil to meet stiffer U.S. air-pollution rules for cars and trucks. Supply disruptions (from weather, political upheavals, terrorism) or refinery outages could also create scarcities.”
- Inverted yield curve. “Since 1965 interest-rate inversions have occurred seven times—and recessions have followed in five, notes Bill Dudley of Goldman Sachs.”
Of course, the beauty of these negative expectations is that the media can continue to report them on a regular basis even if they don’t turn out to be true. If only regular Americans could be so consistently wrong in their places of work without fretting over getting fired.